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Markets awaits manufacturing data

Markets are waiting for manufacturing data, scheduled to be released in Europe and the US later today.

byGarry White

in Economics

02.12.2013

European markets saw the week out on a somewhat mixed note on Friday, with turnover rather subdued on the back of the shortened trading day in the US.

Stocks had a mixed trading session, basically rotating around unchanged levels, with CDS indices taking the line of least resistance and drifting wider throughout the day. The yields on both 10-year core and peripheral government debt were also basically unchanged in range-bound trading.

In the US, stocks saw a late sell-off in the reduced trading session; the S&P closed down 0.08% at 1805.81, with the yield on 10-year US Treasuries ending the day just 1 bp higher at the 2.74% level.

Overnight, Asians stocks are having a mixed session, the Nikkei closed down 0.04% at 15655.07, the Hang Seng is currently up 0.46%, with the Shanghai Composite currently down 0.59%, despite some better than expected PMI data.

As for today, European stocks are set for a mixed open, around unchanged levels, with CDS indices seeing some very mild tightening in early trade; Dec bunds are currently 11 ticks lower at the 141.60 level.

On the macro front, focus in Europe will be on PMI Manufacturing data across the region, with focus in the US on ISM Manufacturing, ISM Prices Paid and Construction Spending.

Elsewhere, in respect to the Bank’s LME, the Co-op Group and Bank have said this morning that “Based on the votes received so far, we expect the proposals to be approved at the meetings of the holders of the Preference Shares, 13% Bonds and 5.5555% Bonds on 11 December 2013. Successful completion of the LME is also dependent on the success of the Scheme - holders of the Dated Notes are currently due to vote on the Scheme on 11 December 2013. We are now highly confident that our £1.5 billion Recapitalisation Plan for The Co-operative Bank can be achieved."

NEWS HEADLINES

FINANCIALS

The Co-op Group and Co-op Bank have announced in an RNS this morning; that the Early Participation Threshold condition has been satisfied. “The Early Participation Threshold was achieved by the Early Participation Deadline. Accordingly, the Early Participation Condition has been satisfied. If the Liability Management Exercise successfully completes, the amount of Group Notes or Bank T2 Notes (as applicable) which holders of Preference Shares, 13% Bonds and 5.5555% Bonds will be eligible to receive upon settlement of the Liability Management Exercise will be the higher amounts based on the Early Consideration Amounts”.

The UK’s Investment Management Association, whose members oversee about £4.5 tln of assets, is pressing regulators to provide more information about the alleged manipulation of the foreign-exchange market, said two people with knowledge of the matter. The trade group wrote to the Financial Conduct Authority in recent weeks, asking how it should respond to clients’ inquiries about whether currency markets are being rigged, said the people, who asked not to be identified because the correspondence is private. The FCA replied that it couldn’t comment on a current investigation, one of the people said - Bbg.

SOVEREIGN

S&P has lowered its long-term unsolicited sovereign credit ratings on the State of The Netherlands to 'AA+' from 'AAA'. At the same time, it affirmed its short-term ratings at 'A-1+'. The outlook is stable. The downgrade reflects the opinion that The Netherlands' growth prospects are now weaker than previously anticipated, and the real GDP per capita trend growth rate is persistently lower than that of peers at similarly high levels of economic development (as defined in the agency’s sovereign ratings criteria).

UK house prices rose in all regions of the country for the first time in more than six years last month as low mortgage rates helped the property revival to broaden, Hometrack said. Values across England and Wales increased 0.5% from October, the property researcher said in a statement today. Prices jumped 3.8% from a year earlier, the most since October 2007 - Bbg. George Osborne stands to reward small businesses in the Autumn Statement this week by pledging an extra £250 mln for the British Business Bank and unveiling a cap on business rate increases. The additional funds will be added to the £1 bln already in the business bank’s coffers as part of a wider push to help small and medium-sized companies struggling to access finance – FT.

Viktor Yanukovich, Ukraine’s president, was under escalating pressure on Sunday night as hundreds of thousands of protesters poured onto the streets of Kiev demanding the overthrow of his government, after it sought to strengthen relations with Russia at the expense of the EU. With the number of protesters estimated to have peaked at some 350,000, the demonstrations mark the largest public gatherings since the 2004 pro-democracy Orange Revolution. Many called for a new “revolution” to end the president’s “bandit regime” – FT.

Chinese manufacturing growth beat analyst estimates in November, indicating the nation’s economic recovery is sustaining momentum amid government efforts to rein in credit growth. The Purchasing Managers’ Index was 51.4, the National Bureau of Statistics and China Federation of Logistics and Purchasing said yesterday, exceeding 24 out of 26 estimates. A separate gauge from HSBC and Markit Economics today was 50.8, topping all 13 analysts’ projections - Bbg.

OTHER

US retail sales are likely to be down on last year in the four days from Thanksgiving to Sunday despite the early opening of stores and a surge in online spending, according to initial estimates. The National Retail Federation said on Sunday that it expected total spending over the long holiday weekend – when some stores opened earlier than ever on Thanksgiving night – to drop to $57.4bn from $59 bln last year – FT.

Worldwide issuance of securities backed by revenues from commercial mortgages has nearly doubled this year to the highest levels since 2007 as US and European banks pile back into property lending. Issuance of commercial mortgage-backed securities has reached $92.9 bln so far this year, up from $48.7 bln in the same period in 2012, according to Dealogic, the data provider. In 2007 institutions issued a record $288.5 bln globally in CMBS before a slump in the value of some mortgage-backed securities sparked fire sales across the asset class – FT.

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